The USD/JPY pair fell during the session on Wednesday, breaking back below the 105 level. This being the case, it appears that the market will have to pullback in order to find some type of supportive action in order to go long. I have no interest whatsoever in shorting this market, but I believe that the 104 level is supportive below, and as a result I feel that buying is the only thing that can be done. Ultimately, I think that the market will grind sideways for the next day or so, as the market will await the nonfarm payroll number coming out on Friday. With that being the case, the market will be difficult to deal with in the next day or so, as the nonfarm payroll number will move this market drastically at times.
The market as you can see could pull back a little bit, and as a result I’m waiting to find some type of supportive candle in order to go long. I think that the market is certainly bullish and not to only buy it, and I think that longer-term we will eventually go to the 110 level. However, it’s very likely that it will be choppy on the way up, so I think this is one of those markets where you simply by on the dips every time we fall and form a supportive candle.
Bank of Japan will certainly do its best to devalue of the Yen.
The Bank of Japan will certainly do what it can to bring the value of the Yen down, as it is very difficult for exporters in Japan to compete with such a highly valued currency. Nonetheless, I think that with the United States and its central bank certainly ready to pull back on quantitative easing, it’s only a matter of time before this pair breaks out, as the US dollar continues to be favored for this reason by itself. On top of that, good economic numbers coming out of the United States will continue to push this pair higher over the longer term.
